Now 20 years old, the Family and Medical Leave Act (FMLA) has become a cornerstone of U.S. employment law and human resource policy. But the law stopped short of ensuring true protection to workers: the FMLA only guarantees unpaid family and medical leave for employees, complicating the economic security puzzle for many workers in the United States.

Today, most U.S. employees still lack access to paid family leave. While the FMLA requires that employers provide up to 12 weeks of unpaid job-protected care leave for eligible workers, the lack of a paid parental leave statute means the United States is one of only four countries in the world without publically sponsored paid maternity leave. Paid family leave can bring important benefits to both families and businesses. Yet, many parents with unpaid leave are forced to choose between financial stability and caring for their newborns.

In 2012, only 35 percent of U.S. employees had access to paid family leave to care for newborns, adopted children, or sick family members.[1] The lack of access is even more pronounced for lower income earners: only five percent of the lowest paid workers had this option. Workers with the least financial security, and therefore the least flexibility to go without pay, often do not have access to income when taking time off for caregiving duties. As a result, the burden of unpaid leave can be too much for many women to bear: almost two-thirds of those who needed but did not take unpaid family leave in 2012 were women.

Expanded access to paid leave would mean substantially increasing the amount of time parents take for caregiving. The impact of the Paid Family Leave program in California, available equally to women and men, gives insight into the difference a paid leave statute could make on a larger scale: the program has doubled the length of leave parents–especially low-income parents–take to stay home with their newborns. It has also significantly increased the number of fathers who take advantage of parental leave, even increasing the length of leave they choose to take.

The time parents spend with young children is crucial for their health and development. When that time is paid, the benefits are even greater. Studies show that paid family leave can dramatically decrease mortality rates for infants and children under age 5, a reduction that does not hold for leave that is unpaid or not job-protected. Paid family leave also increases the initiation and duration of breastfeeding, which can reduce children’s risk for serious illnesses, and improve their cognitive development.

Working women, in particular, stand to benefit from paid family leave. Paid leave could help narrow the persistent wage gap that continues to plague working women. Women who take paid maternity leave have seen an increase in wages and depend less on public assistance in the year after giving birth. Paid maternity leave also keeps women in the workforce, which increases the productivity of the labor force overall, and could potentially improve gender equality both in the home and at work.

Paid family leave has the potential to bring important economic benefits to the country as a whole, as well as to individual businesses. Providing paid leave to federal employees, for example, would save the government and taxpayers $50 million dollars per year in turnover costs by improving recruitment and retention of younger employees. Private industry also benefits from the reduction in costs related to recruiting, hiring, and training. Women in California, particularly those in low-wage jobs, were shown to be more likely to return to the same employer following paid maternity leave than those who did not have access to paid leave.

The myriad benefits of paid family leave are clear. And while a handful of states have passed policies that go beyond the federal requirements, there is much to be done to fill the gap left by FMLA and ensure all workers reap the many benefits of paid family leave. The FAMILY Act represents an important opportunity to do just that by instituting family leave insurance for workers. By allowing parents to care for their loved ones without fear of losing their jobs or incomes, the United States would better support the well-being of its workforce, while simultaneously realigning its priorities with the global norm: providing vital paid family leave to its workers.

[1] A variety of data sources measure paid leave coverage rates and some debate exists over which source provides the most accurate picture. This post uses the Department of Labor’s 2012 Family Medical Leave Act survey, which surveys workers and worksites on provision and access to paid leave for parental purposes.

Lindsey Reichlin is the Research & Program Coordinator at the Institute for Women’s Policy Research and Stephanie Román is the Mariam K. Chamberlain Fellow at the Institute for Women’s Policy Research.